Questions from General Investment

Q: The yield curve is upward-sloping. Can you conclude that

The yield curve is upward-sloping. Can you conclude that investors expect short-term interest rates to rise? Why or why not?

Q: Some scholars contend that professional managers are incapable of outperforming the market

Some scholars contend that professional managers are incapable of outperforming the market. Others come to an opposite conclusion. Compare and contrast the assumptions about the stock market that supp...

Q: Assume you have a one-year investment horizon and are trying

Assume you have a one-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero-coupon bond that pays $1,...

Q: You are a portfolio manager meeting a client. During the conversation

You are a portfolio manager meeting a client. During the conversation that follows your formal review of her account, your client asks the following question: My grandson, who is studying investments,...

Q: Under the liquidity preference theory, if inflation is expected to be

Under the liquidity preference theory, if inflation is expected to be falling over the next few years, long-term interest rates will be higher than short-term rates. True/false/uncertain? Why?

Q: a. Briefly explain the concept of the efficient market hypothesis (

a. Briefly explain the concept of the efficient market hypothesis (EMH) and each of its three forms— weak, semistrong, and strong—and briefly discuss the degree to which existing empirical evidence su...

Q: The yield curve for default-free zero-coupon bonds is

The yield curve for default-free zero-coupon bonds is currently as follows: a. What are the implied one-year forward rates? b. Assume that the pure expectations hypothesis of the term structure is co...

Q: Use the following data in answering below CFA Question; /

Use the following data in answering below CFA Question; Suppose investor “satisfaction” with a portfolio increases with expected return and decreases with variance...

Q: Growth and value can be defined in several ways. Growth usually

Growth and value can be defined in several ways. Growth usually conveys the idea of a portfolio emphasizing or including only companies believed to possess above-average future rates of per-share earn...

Q: The yield to maturity on one-year zero-coupon bonds

The yield to maturity on one-year zero-coupon bonds is 8%. The yield to maturity on two-year zero-coupon bonds is 9%. a. What is the forward rate of interest for the second year? b. If you believe i...